Thousands of small businesses in the region are being warned they could be hit with a hefty fine when a law covering the rights of workers is extended.

Companies who employ more than 50 staff will now be caught by the Information and Consultation of Employees Regulations 2004 (ICE) from April 6.

ICE 2004 gives employees new rights to be informed and consulted about issues that affect their employment and the prospects of the business.

The regulations have already been in force for businesses with 150 or more employees since 2005. Last April, the regulations were extended to cover businesses with more than 100 employees.

Birmingham law firm Wilkes Partnership is advising SMEs that with the impending further extension of ICE they should review their policies to ensure that they have the correct measures in place when the law comes into force for them.

Jennifer Allen, a member of the Wilkes Partnership employment team, urged thousands of SMEs in the region who will be affected by the legislation change to have measures in place before the deadline.

"This extension of the legislation means it covers more businesses than ever before in the region," said Ms Allen. "Employers have to take this new rule very seriously as it could have significant consequences."

The new regulations will be triggered either by an employee making a request for consultation or if an employer decides to implement it. Areas where employees might request consultation include pay, hours, holidays and management buy-outs if they become a TUPE issue.

"If an employee makes a request under the regulations, the employer will need to put in place a consultation framework, unless a sufficient consultation agreement is already in place, detailing who employee representatives are, how consultation will be conducted and time frames among other things," said Ms Allen. "Employers will be required to negotiate an agreement with employees within a strict six-month time limit. If they fail to do so, the employees can refer the matter to the Central Arbitration Committee who will make an order requiring the employer to take action."